Trends and Opportunities in Mobile and Internet Space in China and Rest of the World

Tuesday, June 10, 2008

iPhone 3G launched at WWDC 2008

As predicted and expected, the IPHONE 3G was launched at WWDC 2008 for $199 for 8GB model and $299 for 16GB model this coming July 11th. It comes slimmer and sleaker in black with the 16GB model also available in white. The 1st version of the iPhone has been truly outstanding having achieved the followings :

- 90 percent customer satisfied

- 98 percent are browsing on mobile

- 94 percent are using email

- 90 percent use text messaging

- 80 percent use at least 10 features.

By the way, the 3g version comes with no cam on the front as was revealed by some of the leaked pictures and most importantly this time Apple got it right with the built-in GPS. I reckon GPS will be the biggest feature on the iPhone 3G. With the built-in GPS, you’ll be able to use the maps application all the more effectively. This is going to send chills down the neck of Garmin and TomTom.

iPhone 3G will be available in more than 70 countries later this year, beginning with customer availability in 22 countries namely Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and the US on July 11.

iPhone 3G supports Microsoft Exchange ActiveSync right out of the box. This is perhaps the biggest feature announced today that may scare Blackberry is that Apple is enabling push support something that up until now had been Blackberry's keystone offering. This would definitely remove the only advantage that Blackberry had. There is still one thing though that Blackberry has that the iPhone 3G doesnt, a real keypad. A lot of enterprise users, who type out lengthy emails, and notes, can't see living without them. Will they switch to touchscreen mode?

To date, Apple has sold 6 million iPhones (remember their target this year is to sell 10 million), and with the price cut of the new 3G iPhone dropping to $199, and other enterprise-like features in the works, the difference between the flashy newcomer and the institutional Blackberry seem to be fading.

iPhone 3G supports Wi-Fi, 3G and EDGE networks and automatically switches between them to ensure the fastest possible download speeds. It delivers an amazing 10 hours of talk time on 2G networks and 5 hours using 3G, with up to 5 to 6 hours of web browsing, up to 7 hours for video playback and up to 24 hours for audio playback.

The pricing for the iPhone 3G with AT&T is based on a 2-year contract. Unlimited data plans for iPhone 3G customers will be $30/month while business users will have to fork out $45/month. Also there will be NOrevenue sharing going forward between Apple and AT&T. According to a press release from AT&T, the carrier will no longer give a portion of monthly usage fees to Apple. Instead carriers will pay Apple a subsidy for each phone sold, in order to bring the price from $399 down to $199 for the 8 Gigabyte model. The company did not specify the amount of the subsidy. Subsidies of $200 to $300 are common in the industry.

What is more, consumers will now pay $30 a month for unlimited data service from AT&T, compared to $20 under the plan introduced last year. So even though the phone will now cost $200, consumers will be paying more at the end of a two-year contract compared to the previous deal. Of course, that includes faster 3G data service, so the price increase may be worth it. But we should call it an iPhone price increase, not a cut.

For Apple, this move to getting all its money up front has several advantages. By using the same economic model as every other mobile phone manufacturer, it makes it easier to bring the phone to carriers in every corner of the world. It also should help insulate Apple from the cost of people who buy iPhones and unlock them to use on carriers that don’t pay Apple the monthly fee. Now Apple will get its money, say $500, up front and it no longer has to police what people do with them.

Without the revenue sharing agreement with the operators, I see no reason why Apple would not be able to cut a deal with China Mobile and the other two 3G operators in the very near future. I m quite certain that iPhone 3G will be making its way to China by this year and at $199/299, its an affordable offer thats within the reach of many of the mid-to-high end chinese mobile phone users who would consider dumping their existing boring looking mobile device for the sexy iPhone 3G. The only thing that may hinder their consideration would be having to sign a service contract with the Operators.

4 comments:

hey pal, you know my position towards the iPhone - since you got one I saw many other people complaining about it. Now, the new version brings new features, but the things you and others complained about are still there...For me, a no-go because it doesn't come with a decent camera, it's either too big for a mobile phone or too small to really use it a as a internet tablet...My first reaction to the design: it tends to look similar to Blackberry :-(